An entrepreneur is an individual who generates ideas or acts upon the ideas of others. One of the most important skills of any entrepreneur is their ability to raise the necessary capital to bring life to those ideas. Whether they’re trying to close a real estate deal, launching a new product, or starting a new business, there are several creative ways of financing a venture that can help the entrepreneur avoid having to put an idea on hold or miss an opportunity. OPM (other people’s money) is a cornerstone of creative financing, and plays an integral role for a healthy economy; as ideas & capital are the two factors that drive it.

Credit Cards Credit cards, one of the most common forms of OPM. This is probably one of the most squandered forms of creative financing as well. They’re like having little investors in your pocket, to be called upon whenever capital is needed, and without the human bias a living investor or loan officer would have! This is great for entrepreneurs, but can also be very counter-productive. I am going to focus on the positive here, but for those of you who want the cautionary headings of playing with credit, you can read “Good Debt vs Bad Debt”. As an entrepreneur/investor, credit cards can be your most accessible resource for financing most ventures. Tips for entrepreneurs to consider when it comes to credit cards for creative financing:· Have at least three credit cards from three companies (Master Card, Visa, Discover, American Express, etc.)· Request an increase in your credit limit and request a decrease in your interest rate, through quarterly reviews with your credit card company via phone call.· Hold onto cash advancement checks you may receive in the mail, and know how much cash advance you have access to thru an ATM.Hard Money Lenders & Angel Investors Hard money lenders are typically companies, and they invest in deals (usually real estate). Hard money lenders share a common denominator with angel investors (private lenders), that they have more creative freedom when it comes to the underwriting of a loan, because private money is providing the financing. Hard money lending companies are more focused on the structure of a deal rather than just the personal credit of the individual requesting the loan. Points for entrepreneurs to consider when it comes to hard money lenders for creative financing:· The usual loan is up to 70% LTV, and is based on the value of the asset· The loan is a short term (see bridge loans) with a high interest rate (10%-20%)· They use the asset the loan is funding as collateral to seal the deal Angel investors or silent investors are made up of private lenders/investors or venture capitalists. These are individuals who will invest ideas/businesses in exchange for an interest of varying forms. If you have ever watched the show Shark Tank, then you’ve had insight of what to expect when requesting financing. Venture Capitalists are simply people who put their money to work under the basic principal of gaining a return on their investment and/or making an expansion on their asset portfolio. This could be in the form of a loan with interest, an equitable stake in your business, ownership or rights to the licenses/patents or other intellectual property of your business, and/or royalties from your sales, etc. Tips for entrepreneurs to consider when it comes to Angel Investors for creative financing:· Have some proof of sales or purchase orders· Your business is proprietary, not a service that revolves around yourself or a product anyone has rights to manufacture/sell· Have a prototype, performance track record, and business model/plan to presentCrowd-funding The internet has made this form of OPM a popular form of creative financing for artists, innovators, and entrepreneurs alike, with the emergence of websites like Kickstarter. Crowd-funding has quickly grown in popularity because instead of an entrepreneur negotiating ownership rights with capitalists/investors or worrying about getting into bad debt through loans, they get the chance to present their project to an open market of patrons who will personally decide if they would like to see the production of proposed idea, through their monetary support. This form of creative financing has brought real world truth to the concept that money follows good ideas. If you have a great idea than you shouldn’t have to worry about where you are going to get the funding for your idea, because the law of attraction is alive and well in crowd-funding. Tips for entrepreneurs to consider when it comes to crowd-funding for creative financing:· Make sure you can deliver on the idea you are selling to the public· Do not make promises to the public that you are not prepared to be held accountable for· Be as transparent as you can on how the funds will/are spent